Dow falls 200 points in final session of 2022 as Wall Street heads for worst year since 2008

Stocks fell on Friday as investors made their final trades in the worst year for the market since 2008.

The Dow Jones Industrial Average slipped 220 points, or 0.7%. The S&P 500 shed 0.8%, while the Nasdaq Composite also dropped 0.8%.

Friday marks the final day of trading in what has been a painful year for stocks. All three of the major averages are marching toward their worst year since 2008, slated to snap a three-year win streak. The Dow fared the best of the indexes in 2022, down 9.4%. The S&P 500 and tech-heavy Nasdaq tumbled 20% and nearly 34%, respectively.

Sticky inflation and aggressive rate hikes from the Federal Reserve battered growth and technology stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and volatile economic data also kept markets on edge.

“We’ve had everything from Covid problems in China to the invasion of Ukraine. They’ve all been very serious. But for investors, it is what the Fed is doing,” said Art Cashin, director of floor operations for UBS, on “The Exchange.”

As the calendar turns to a new year, some investors think the pain is far from over. They expect the bear market to persist until a recession hits or the Fed pivots. Some also project stocks will hit new lows before rebounding in the second half of 2023.

“I would love to tell you that it is going to be like the ‘Wizard of Oz’ and everything is going to be in glorious color in a moment or two. I think we may have a bumpy first quarter, and depending on the Fed it may last a little longer than that,” Cashin said.

Despite the yearly losses, the Dow and S&P 500 are on pace to snap three-quarter losing streaks. The tech-heavy Nasdaq, however, is on track for its fourth consecutive negative quarter for the first time since 2001. All three averages are negative for December, however.

Communication services was the worst performing sector in the S&P 500 this year, falling more than 40%, followed by consumer discretionary. Energy was the only sector to rise, climbing nearly 60%.

— Gabriel Cortes contributed reporting

Correction: A chart in this story has been updated to reflect the correct year-to-date decline for the Dow Jones Industrial Average.